Summary: This case argues that the federal Highway Trust Fund (HTF) is an inefficient way to pay for roads.
Released: Filed Under: Stoa Policy
About "Abolish Highway Trust Fund (AFF)"
The federal Highway Trust Fund (HTF) is a pot of money funded by federal excise taxes on gasoline and diesel fuel. Congress allocates monies from the HTF as grants back to state and local governments to pay for road construction (and some percentage also goes to subsidizing mass transit). This case argues that this is an inefficient way to pay for roads, since cycling the money through Washington adds no value and creates a lot of problems.
Since the States perceive it as “free” money, they sometimes use it for projects that they would never think worthy if they had to tax their own citizens and pay for it themselves. And the “trust fund” isn’t really accomplishing its mission anyway: Congress routinely overspends the budget and ends up having to borrow deficit dollars to cover what was supposed to be entirely covered by taxes on people who use the roads. Turning highway funding responsibility back to the states would be the best option for taxpayers and road users. States could raise their own gas taxes if they think they need more roads, and construct only the roads they need and are willing to pay for.
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